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Funding in Malaysian higher education could on the verge of a “cash flow crisis”, an MP has claimed.

Rafizi Ramli, a member of the Malaysian parliament representing Pandan, said that the organisation responsible for awarding loans to university students slashed the amount available for 2015 compared with 2010, according to a report in the Malay Mail.

He added that unless the funding system was reformed there could be difficulties ahead.

Mr Ramli cited data provided by the deputy higher education minister, Daruk Mary Yap, in November that showed in the first nine months of 2015 the National Higher Education Fund Corporation, known locally as the PTPTN, had approved just over RM2 billion (£370 million) for finance. But in the 12 months of 2010 that figure was around RM6 billion, he added.

“Because the higher education system in this country is largely dependent on PTPTN, its failure to finance a drastic number of students means the current higher education system is at a critical point,” he said.

The People’s Justice Party representative added that the PTPTN has been taking “drastic action” to recoup loans previously awarded to students. It was reported earlier this year that borrowers who have defaulted on their loans have been added to a credit blacklist and may face problems getting credit in the future.

These actions “show PTPTN is facing a cash flow crisis”, he said.

Mr Ramli has previously proposed that tertiary education be free for those studying their first degree in Malaysia.